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Tough measures to fix Egypt's economy

Tough measures to fix Egypt's economy

Egypt

Egyptian President Abdel Fattah al-Sisi warned Egyptians on Monday that tough measures would be needed to turn the country’s ailing economy around.

The warning comes as the government negotiates a $12 billion loan with the International Monetary Fund which will include subsidy cuts, tax reforms, and privatisations of state-owned companies.

Abdel Fattah al-Sisi told his a audience at a leadership conference that, “the challenge is never which measures to take, the challenge is whether we, as a society and our public opinion, are prepared or have been given the appropriate amount of information, in order to deal with and accept these measures – which could sometimes be tough or harsh”.

Last week, Egypt said it was seeking $4 billion a year over three years from the IMF to help plug a funding gap.

Sisi’s government has been at pains to avoid a public backlash by showing that reforms are home-grown and not imposed from outside.

Import-dependent country has faced a dollar shortage since the 2011 uprising that ended Hosni Mubarak’s 30-year rule but also scared off tourists and foreign investors.

The gap between the Egyptian pound’s official and black market exchange rates has widened to more than 40 percent although news of the loan has underpinned the local currency.

Sisi said that Egyptians would “very soon” be able to purchase U.S. dollars at a unified rate, adding: “The next few days will see a lot of good news for the Egyptian people.”

Reuters